Comments from global tech managers and investors are clearly pointing out that, “the China tech stock scene has been a bloodbath in the last few months.” Investors in China and of course those companies that have joint ventures know the current climate and that pain that comes with holding and investing in Chinese stocks. The South African internet and media company Naspers, owns 31% stake in the Chinese tech firm Tencent, which is valued at about $126 billion. Jaspers made a $32 million investment in Tencent in 2001, taking a large positions in the little known company which is worth $126 billion today.
The KraneShares CSI China Internet exchange-traded fund which tracks Chinese stocks including Baidu, Tencent and Ailbaba has tumbled 14% over the past three months. Investors who are focused on China are now saying that this tech sell-off is short-term and that the long-term outlook is positive.
Global equity markets are now under pressure with the US S&P 500 falling from the 2,950 range to the 2,750 range in a matter of weeks as the protracted trade war has added more uncertainty to the system. Some banks and investors are now concerned that the next move by the Fed will be a rate cut. This comes as the US President has suggested he will start applying tariffs on Mexican goods coming to the US. This is in relation to the attempted migrant border crossings with have jumped to over 100,000 per month recently.
Finally, the US and Iran are still not at the table as discussions have broken down. The US wants a deal that allows nuclear inspectors to visit Iran – from many nations – to ensure that there is no new threats to the region. If Iran gets weapons, Saudi Arabia and Kuwait will demand them as well. A Middle East arms race is a real and present danger.